Can an organization have Basic Salary as the only component of the salary structure? Is there any law that directs organizations to have other components?
I am trying to have mediocre job employees of an organization pay only the minimum wage in basic and no other components.
From India, Ahmedabad
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I am trying to have mediocre job employees of an organization pay only the minimum wage in basic and no other components.
From India, Ahmedabad
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Dear friend,
First, when you pay salary/wages to an employee simply without any components, it is called consolidated wages, and the entire sum would be taken into account for the purpose of the calculation of indirect benefits like statutory bonus, contributions to EPF and ESI, gratuity if such benefits are applicable, lay-off, or retrenchment compensation, etc.
Secondly, under the Minimum Wages Act, 1948, it has been the practice of appropriate Governments to fix the basic wages with reference to the skill level required for the job and to add the component of variable dearness allowance linked to some cost of living index. To my knowledge, no other components by way of allowances are prescribed or added under the Act except the value of other amenities required by the very nature of the job like free food, etc.
If I remember correctly, some States like Maharashtra and Gujarat have separate laws prescribing compulsory payment of house rent allowance, which should also be treated as part of the statutory minimum wages.
From India, Salem
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6108First, when you pay salary/wages to an employee simply without any components, it is called consolidated wages, and the entire sum would be taken into account for the purpose of the calculation of indirect benefits like statutory bonus, contributions to EPF and ESI, gratuity if such benefits are applicable, lay-off, or retrenchment compensation, etc.
Secondly, under the Minimum Wages Act, 1948, it has been the practice of appropriate Governments to fix the basic wages with reference to the skill level required for the job and to add the component of variable dearness allowance linked to some cost of living index. To my knowledge, no other components by way of allowances are prescribed or added under the Act except the value of other amenities required by the very nature of the job like free food, etc.
If I remember correctly, some States like Maharashtra and Gujarat have separate laws prescribing compulsory payment of house rent allowance, which should also be treated as part of the statutory minimum wages.
From India, Salem
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Re: key5 I want to know more opinions on this topic so I comment here!
From Vietnam, Haiphong
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From Vietnam, Haiphong
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Dear Member taking into consideration only basic wages is lawful. We add other component in basic wages entirely depend on employer. If employer wish to give extra benefits to employee .
From India, New Delhi
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From India, New Delhi
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Minimum wages are declared by the competent authorities through gazette notifications. Apart from this, Special Allowances or dearness allowances and HRA also form part of the salary. Other statutory components need to be included in the salary structure, like Bonus, Leave with wages, National holidays, and gratuity as entitlement subject to eligibility and entitlement. The statutory benefits like EPF, ESIC, LWF, etc., are also part of the salary and mandatory to be included in the salary.
From India, Vadodara
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From India, Vadodara
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SALARY CAN BE SPLIT INTO COMPONENTS BUT NOT LESS THAN THE MINIMUM WAGES.docx
Minimum Wage of UP & UK.pdf